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A Lesson from a Pro

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A well-known professional home stager, recently, decided to sell the 4,000+ square foot home which she lived in with her husband.   It was certainly well maintained and by most standards, could have gone on the market immediately.   However, she still went through a full staging effort before she listed the home. The work included painting inside and out especially, changing the kitchen cabinets from gray to white.   The carpet was replaced along with a few dated light fixtures.   They stained the fence and added minor landscaping to make it look fresh and inviting.   They removed personal items from the home that might be distracting and replaced some furniture that was too large and might have limited a buyer's imagination. The home looked, smelled, and was clean.   It had great drive-up appeal.   Each room looked like it belonged in a magazine and the professional photos let potential buyers see the home before they visited it in person.   When the home did come on the marke

Equity, Price and the Agent You Select

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A Seller's equity in their home is the difference between what the home is worth and what they owe.   At any point in time, it is an estimation because value is a very subjective term.   If the seller thinks the home is worth more than an actual buyer will pay for it, the estimated equity is too high.   If a buyer is willing to pay more than the seller believes the home is worth, the estimated equity is too low. A true determination of equity becomes more objective when the home is sold, and the value is solidified by the sales price.   This value is determined by negotiations between a seller and buyer and eliminate speculation and conjecture because money and title are being exchanged. The equity being defined above is more accurately referred to as Gross Equity.   After the ordinary and necessary expenses connected with the sale of a property are deducted from the sales price, along with any mortgage balance and/or liens, the proceeds are referred to as Net Equity. Like in

Rising Rents - Music to Your Ears?

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Rents going up may not be pleasant to hear for tenants, but it could be music to your ears if you are an investor. The recent CoreLogic Single-Family Rent Index, April 2021 , showed a 5.3% increase in national rent year over year which doubled the increase experienced in April 2020.   This is the largest annual rent price increase in nearly 15 years. Interestingly, detached rentals are experiencing an even higher growth rate of 7.9% year over year compared to the 2.2% annual rate for attached rentals.   This is supported by the CoreLogic report that half of millennials and 2/3 of baby boomers "strongly prefer to live in a single, stand-alone home." From an investor's point of view, single-family rentals offer large loan-to-value mortgages at fixed interest rated for long terms on appreciating assets with definite tax advantages and reasonable control.   Rentals are considered to be the IDEAL investment because if offers income to offset the carrying cost of the in

Homeownership Cycle and Inventory

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An interesting homeownership cycle begins with a starter home and progresses to larger and smaller homes throughout a person's lifetime.   Within a few years after purchasing their initial home, they might move up to a little larger house.   The reasons could be that they simply want a larger home and can afford it, or their increased family size may be motivating the move. While the children are small, they can probably get by with less space but as they grow and behave more like adults, even though they may not be, the need for more room becomes more pressing.   Depending on the size of the family, this will last some time and then, as they go off to college, enter the work force and find their own living space, the parents may find that they no longer need the larger home.   In the interest of saving money or possibly convenience, they migrate from a larger home to a smaller home until they consider an assisted living facility or possibly, a nursing home.   Another alternati

Mortgage Forbearance

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Some homeowners who could not afford to make their mortgage payments this past year have been relieved to find out that their mortgage servicer or lender allowed them to pause or possibly, reduce their payments for a limited period.   While it does relieve the financial pressure, it is a temporary remedy. About 2/3 of the people who entered forbearance during the pandemic have exited the program.   There are only a little over two million homeowners remaining in forbearance. It is important for owners who find that they cannot make the payments on their mortgage to contact their lender and request a forbearance.   If you stop making mortgage payments without a forbearance agreement, the servicer will report this information to the credit reporting companies, and it can have a lasting negative impact on your credit history.   Without going through that process, the lender assumes you are delinquent, and protections afforded under forbearance may not apply. Forbearance does not for

Selecting the Right Agent in a Seller's Market

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Even in the current, low inventory housing market, sellers are resisting the urge to sell it themselves and still seeking the help of a real estate professional.   It may be more important than ever and there is too much at stake to risk going it alone. The number of people attempting to sell on their own has been in steady decline since 2003 from 14% to 8% in the latest Profile of Home Buyers and Sellers produced by the National Association of REALTORS®. The most frequently mentioned difficulties that owners who decided to sell it without the benefit of an agent included preparing the home for sale, understanding, and performing the paperwork, getting the price right and selling it within the length of time planned.   Another commonly cited challenge was having enough time to devote to all aspects of the sale. The other nine out of ten homeowners who are selling are many times faced with the question: "How do I determine which agent to use?"   In some situations, owner

A Sad Story Relived Over and Over

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Ask any real estate agent and they will tell you a similar sad story.   The seller, whose home just hit the market, received an offer which was less than the list price, but felt secure their home would sell quickly and countered for more.   For whatever reason, the buyer did not continue to negotiate and moved on. After a week or two and no other offers, the seller instructed the listing agent to contact the buyer's agent and say that the seller had reconsidered and would now accept their original offer. However, the initial enthusiasm the buyer had was gone and they were looking elsewhere. This is a story that frequently happens across America, in all price ranges.   The lesson to be learned is that sometimes, the first offer is the best.   Consider the rationale, a home is fresh on the market and buyers, especially the ones who have lost bids on other homes, act quickly to hopefully avoid some of the competition. When an offer is not accepted, it voids the original offer a